Social and Cultural Challenges in ERP Implementation: A Comparative Study Across Countries and Cultures

Social and Cultural Challenges in ERP Implementation: A Comparative Study Across Countries and Cultures

Sapna Poti (Indian Institute of Technology Madras, India), Sanghamitra Bhattacharyya (Indian Institute of Technology Madras, India) and T.J. Kamalanabhan (Indian Institute of Technology Madras, India)
Copyright: © 2011 |Pages: 24
DOI: 10.4018/jissc.2011100104
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Abstract

This paper studies the differential practices of change management in organizations of western origin and compares it with the best practices prevalent in Indian organizations, with special emphasis on social and cultural challenges faced in these countries. Since Enterprise Resource Planning (ERP), as part of an information and communication technology (ICT) initiative, is frequently associated with organization change and transformation in relation to its adaptation, it has been used as the context in this study. The impact of social factors and cultural challenges on change management processes and elements are compared and contrasted using multiple case studies from USA, Canada, European (Western/Eastern) and Indian organizations who have adopted ERP technologies. The conceptual framework highlights cultural and social factors that affect ERP implementation, and offers suggestions to researchers to empirically test these influences using sophisticated analytical methods and develop change strategies and practices in response to these challenges. Further, it also draws attention to the need for a contemporary, result-oriented, quantitatively measurable framework of change management at the individual and enterprise levels. It is expected that such an approach would result in better buy-in from all stakeholders in terms of increased accountability.
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Theoretical Framework

The theoretical framework of this paper includes:

  • 1.

    Literature review on Enterprise Resource Planning and Evaluation issues

  • 2.

    Case analysis of organizations that have implemented ERP across countries.

Context And Backdrop

Enterprise Resource Planning (ERP): ERP is a tool that integrates information flowing into and out of a company's interdepartmental incompatible database(s) to provide smooth customer service through integration of functions such as marketing, sales, production, financials, materials, and human resources, leading to reduced inventory write-offs and increased profitability in the long run (Davenport, 2000).

Despite the huge need for ERP, the expected benefits are often not forthcoming, with many ERP projects failing to deliver the intended results. The reasons for failure are many and could range from fitment issues in terms of the processes not being mapped to the packages, lack of experience with structured change processes, lack of business integration with the ERP packages, or frequent technical challenges. For instance, by nature, an enterprise system imposes its own logic, best practices and structure on the client company's strategy, culture, organization of departments and structure and hence pushes for and demands a huge amount of change management which client companies may not expect or plan for. These systems force firms to do business in ways that conflict with their vested interests or agenda, and hence could lead to a chaotic scenario. For most organizations, a change management initiative such as an ERP implementation involves the highest cost, time and effort possible in the organization’s history (Davenport, 2000). Top managements at times decide to persist with the implementation, thrusting the entire responsibility on the Information technology department without realizing that the issues are to be dealt with elsewhere. Davenport suggests some essential steps for better ERP implementation success which include clarifying strategy in advance, changing organizational structure, putting the right people in place and installing an enterprise system gradually.

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